Short Reads

Belgian Competition Authority confirms that the acquisition by a dominant player of a small competitor is not automatically an abuse of a dominant position

Belgian Competition Authority confirms that the acquisition by a dominant player of a small competitor is not automatically an abuse of a dominant position

Belgian Competition Authority confirms that the acquisition by a dominant player of a small competitor is not automatically an abuse of a dominant position

02.01.2017 NL law

On 21 November 2016, the Belgian Competition Authority ("BCA") rejected a request for provisional measures by Alken-Maes ("AM"), the second brewer on the Belgian beer market, against Anheuser-Busch Inbev ("ABI"), the number one player and, according to the provisional decision, the dominant player.

The request pertains to the acquisition by ABI of the Bosteels brewery, which holds a number of important connoisseur beers (‘degustatiebieren’) in its portfolio – chiefly the ‘Karmeliet’ brand. The acquisition remained below the Belgian merger control notification thresholds. However, AM lodged a complaint, claiming that the operation amounted to an abuse of dominant position by ABI (article IV.2 of the Code of Economic Law (CEL)). AM applied for interim measures to suspend the integration of Bosteels into ABI.

The BCA held that the request for provisional measures was admissible, yet unfounded. Referring to the Court of Justice’s Continental Can judgment, the BCA acknowledged that mergers can in principle give rise to an abuse of dominant position. It stressed that the review of such operations is primarily governed by the merger control regime (with its clear timetables), but warned of the possible harmful effects of imposing provisional measures in such context. In light of this, the BCA held that there should be ‘strong indications’ in reaching the conclusion that an acquisition could amount to an abuse of a dominant position, and that this presupposes more specific adverse competition consequences other than the merger effect itself.

Upon closer scrutiny, the BCA found no such prima facie indications. While recognizing the dominant position of ABI on the Belgian on-trade and off-trade beer markets, it noted that the acquisition results in only a very limited increase of ABI’s market share, and only a limited increase in the segment for connoisseur beers. The BCA further examined the arguments of AM that the acquisition would nonetheless amount to an abuse of dominant position because it would (i) make ABI the only brewer with a complete portfolio of significant brands, (ii) prevent competitors from strengthening their position in the connoisseur beer segment, (iii) rob competitors of an ‘infiltration’ weapon, (iv) reinforce the negotiation position of ABI, and (v) result in an increased dependence of (small) brewers in the connoisseur segment on ABI. On the basis of an analysis of various facts, the BCA dismissed each of AM’s arguments. In the end, the BCA concluded there was insufficient evidence of a prima facie breach or of serious and irreparable harm. At the same time, the BCA warned that if ABI were to prevent the sale of competing connoisseur beers from catering businesses linked to ABI, such conduct could at a later stage be tested against articles 101 and 102 TFEU, also having regard to the binding commitments entered into by ABI vis-à-vis the European Commission.

The case on the merits pursuant to the complaint of AM remains pending.

This article was published in the Competition Law Newsletter of January 2017. Other articles in this newsletter:

1. General Court rules on the concept of a single and continuous infringement in the smart card chips cartel case 
2. Envelope maker's cartel fine annulled in first successful European settlement appeal
3. District Court of Limburg rules that damages claims in the Dutch prestressing steel case are time-barred
4. ACM established guiding principles in relation to sustainability arrangements

Team

Related news

07.11.2019 NL law
Tackling Big Tech up-front? Time to stop thinking and start acting

Short Reads - Benelux competition authorities have published a joint memorandum on how best to keep up with challenges in fast-moving digital markets. As well as calling on the European Commission to issue an economic study on digital mergers, the memorandum calls for an ex ante intervention tool to fill the gap between interim measures and ex post enforcement. This tool would pre-emptively impose behavioural remedies on digital gatekeepers without first having to establish an actual competition law infringement.

Read more

08.11.2019 BE law
Interview with Wouter Ghijsels on Next Gen lawyers

Articles - Stibbe’s managing partner Wouter Ghijsels shares his insights on the next generation of lawyers and the future of the legal profession at the occasion of the Leaders Meeting Paris where Belgian business leaders, politicians and inspiring people from the cultural and academic world will discuss this year's central theme "The Next Gen".

Read more

07.11.2019 NL law
Rotterdam District Court rules that claims in elevator cartel damages proceedings need further substantiation

Short Reads - The Rotterdam District Court has ordered claimant SECC (a litigation vehicle) to substantiate its claims in proceedings against Kone and ThyssenKrupp regarding the elevator cartel. The Court also ruled that some claims have become time-barred, unless SECC can show that these were timely assigned to SECC and notified to Kone and ThyssenKrupp. The Court rejected several defences of Kone and Thyssenkrupp, including a jurisdictional challenge based on arbitration clauses between the defendants and assignors of claims to SECC.

Read more

07.11.2019 NL law
Safeguarding legal privilege: better safe than sorry?

Short Reads - The European Court of Justice recently ruled that the European Commission does not have to take additional precautionary measures to respect the right of legal professional privilege when conducting a new dawn raid at the same company. Companies are well-advised to mark clearly all communications covered by legal privilege as 'privileged and confidential' and to keep all privileged communication separate from other communication.

Read more

Our website uses functional cookies for the functioning of the website and analytic cookies that enable us to generate aggregated visitor data. We also use other cookies, such as third party tracking cookies - please indicate whether you agree to the use of these other cookies:

Privacy – en cookieverklaring